Bad Brad\'s BBQ had cash flows for the year as follows ($ in millions): Bad Brad

Question

Bad Brad's BBQ had cash flows for the year as follows ($ in millions):

Bad Brad's would report net cash inflows (outflows) from financing activities in the amount of:

$1,100.

($1,100).

$820.

$900.

CASH RECEIVED FROM: Customers $1,800 Interest on investments 200 Sale of land 100 Sale of common stock 600 Issuance of debt securities 2,000 CASH PAID FOR: Interest on debt $300 Income tax 80 Debt principal reduction 1,500 Purchase of equipment 4,000 Purchase of inventory 1,000 Dividends on common stock 200 Operating expenses 500

Explanation / Answer

CASH RECEIVED FROM: Sale of capital stock 600 Issuance of debt securities 2000 Total 2600 CASH PAID FOR: Debt principal reduction 1500 Dividends on capital stock 200 Total 1700 Net cash inflow from financing activities 900 Cash inflows Amount 1 Customers 2500 2 Interest on investment ( to be dealt in investing activities) 3 Sale of land ( to be dealt in investing activities) 4 Sale of common stock ( to be dealt in financing activities) 5 Issuance of debt securities ( to be dealt in financing activities) Cash outflow 6 Interest on debt ( to be dealt in financing activities) 7 Income Tax 90.00 8 Debt principal reduction ( to be dealt in financing activities) 9 Purchase of equipment ( to be dealt in investing activities) 10 Purchase of Inventory 950 11 Dividends of common stock (to be dealt in financing activities) 12 Operating expenses 750.00 Net Cash flow from operating activities 710

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